Adelaide car maker remains optimistic despite job cuts.

Mitsubishi brakes, gets set to speed

After slashing its workforce by 12 per cent because of falling sales in a large car market hammered by soaring petrol prices, Mitsubishi is still banking on recovery later this year.

The company believes it has history on its side when it comes to making an optimistic forecast.

Demand is down 22 per cent so far this year, with the sector suffering from the runout of two key models and rising petrol prices which have pushed buyers into smaller cars. The company has already trimmed its workforce by 250 to 1800, but wants to axe another 100 assembly line jobs, which would bring the cuts to about 16 per cent.

Mitsubishi spokesman Kevin Taylor said yesterday that previous experience suggested large vehicles would return to favour following the launch of volume-selling models from Holden and Toyota.

Sales of the new VE Commodore start this month and the new six-cylinder Toyota Aurion will be released in the final quarter of this year.

Mr Taylor said buyers had been waiting to see the new Commodore and might even be hanging out for the Toyota rival.

The real worry for all four local car manufacturers is whether the currently high petrol prices will be maintained over the longer term, unlike previous fuel price spikes.